Nov 27, 2008

World - EU governments to widen cap on mobile roaming costs

Huw Jones

BRUSSELS (Reuters) - European Union governments are set on Thursday to cap prices of roamed mobile phone texts and data downloading along with other measures to spur a wider range of cheaper services for customers.

EU Telecoms Commissioner, Viviane Reding, has proposed widening the scope of existing price caps on mobile phone calls made outside a home state in the 27-nation bloc to include roamed text messages and surfing the Web using a handset.

The bloc's telecom ministers are set to give the green light to the measure that also extends by three years to 2013 existing price caps on roamed voice calls. Reding said last week she expects "strong agreement" on the measure.

The European Parliament, which has a joint say on the legislation that is expected to take effect July 1 2009, is also expected to give its backing at a later date.

Reding has proposed a retail price cap of 11 euro cents per roamed text compared with the current EU average of 29 cents.

Ministers are also expected to back her proposal for billing of roamed voice calls per second from the 31st second to crackdown on operators that charge by the minute only.

Reding also proposed a wholesale cap of 1 euro per megabyte on roamed data but some governments want a lower cap. Ministers may agree a new provision to stop "bill shock" for data roaming services such as a cutoff or warning after 50 euros.

Operators say consumers could ultimately be hit.

"It is important to look beyond this new extension in order to get out of this cycle of price regulation that tries to target just a piece of the market and which gradually makes investments in new networks less compelling," a spokesman for Orange-France Telecom in Brussels said.

Separately, ministers will also seek a deal on a package to boost competition so that consumers have cheaper services.

The European Parliament, which has joint say, has adopted a first reading version which diluted Reding's proposals.

"It's not a big revolution. As it stands, the package is a missed opportunity to stimulate competition and crucial investments in infrastructure at a moment when Europe is facing increased economic pressure," Orange-France Telecom said.

EU states are likely to adopt a version of the package that differs so that negotiations will be needed with parliament before a final deal sometime next year.

The following are the points of contention:

-- Reding wanted a new EU-funded telecoms regulator that also looked at Internet security. Parliament wants a less powerful body, partly funded by the EU and excludes Internet security. EU states want a non-EU body that would simply coordinate national telecoms regulators;

-- Reding sought a veto on steps taken by national regulators deemed insufficient to boost competition. Parliament watered this down in favor of effectively giving the new EU body the last word. Most EU states are also opposed to a Commission veto;

-- Reding wants some pan-EU coordination of managing spectrum or freeing up radio waves for new uses such as mobile television. Parliament backed loose coordination but EU states insist spectrum is a national competence.

-- Reding and parliament want to give national regulators the option of forcing a telecoms group to "functionally separate" and run its network and services arms separately to give competitors full access to a network. EU states are divided over such a regulatory tool.